Netflix just blew out expectations for new subscribers, and the stock – one again – is at all time highs.  To understand why Netflix is so successful is to understand that the company keeps investing in entirely new markets and solutions, which drives new revenue streams.  Rather than focusing on how to do more of the same better, faster, cheaper Netflix keeps using trends to find new growth opportunities.

This podcast explains how attempts to defend & extend your business ultimately fail – like Sears.  And like the bad decisions McDonald’s made to grow the burger business rather than investing in Chipotles and Boston Market.  And how the CNN CEO killed CNN+ when the market was going digital.  Yet we all over-invest in our old business, and under-invest in doing the new thing.  Because we’re too comfortable thinking we can get away with it, when in fact we can’t.

Thinking Points:

• How much of your time do you spend defending & extending your current business versus looking for new opportunities?
• How many of your best people are working on defending your current business vs identifying new opportunities?
• How willing are you to invest in something new for higher growth, even as returns on your existing business are declining?
• Are you watching trends and figuring out how the world will create opportunites, or are you fixated on solving problems?

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